Japan Faces Greater Challenges Amid Middle East Conflict, Says RBC Wealth Management Strategist

RBC Wealth Management portfolio strategist Nicholas Gwee has highlighted Japan's heightened vulnerability due to the ongoing Middle East conflict. According to Jin10, Gwee noted that Japan, as a net importer of oil, faces more significant challenges compared to other regional countries. Over 90% of Japan's imported crude oil originates from the Middle East, with more than 60% transported through the Strait of Hormuz. Additionally, Japan relies on the Middle East for liquefied natural gas and naphtha supplies. Gwee emphasized that if the conflict persists, the most affected sectors would include banking and financial services, aviation and transportation, shipping, energy-intensive manufacturing, refining and petrochemicals, as well as electronics and export-oriented industries. He further stated that prolonged conflict and restricted energy supplies would continue to pressure the Japanese stock market.